A U.S. jury found it Monday Theranos founder Elizabeth Holmes guilty of conspiring to defraud investors in the start-up of blood tests. Holmes was convicted on four of 11 charges.
She was acquitted on four counts and the jury could not reach a decision on three counts.
Prosecutors said Holmes, 37, defrauded private investors between 2010 and 2015 by convincing them that Theranos’ small machines could run a series of tests with a few drops of blood from a finger prick.
Holmes was also accused of misleading patients about the accuracy of the test.
Holmes rose to fame in Silicon Valley after founding Theranos in 2003.
Wealthy private investors, including media mogul Rupert Murdoch, invested millions in the company after meeting with the founder, who was known for his Steve Jobs-like black roller collar.
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The case has shed light on Theranos’ failed attempt to revolutionize laboratory tests. The company secretly relied on conventional machines manufactured by Siemens to run patient tests, prosecutors said.
Theranos collapsed after the Wall Street Journal published a series of articles suggesting that its devices were flawed and inaccurate. Holmes was indicted in 2018 along with Theranos’ former chief operating officer Ramesh “Sunny” Balwani.
She had pleaded not guilty to nine counts of fraud and two counts of conspiracy. Balwani has also pleaded not guilty and will be prosecuted at a later date.
During the trial in San Jose, California, which began in September, jurors heard testimony from former Theranos employees who said they left the company after witnessing problems with its technology.
Investors testified that Holmes made misleading claims about Theranos, such as that its machines were used in the field by the U.S. military. And previous patients told jurors they would not have used Theranos’ test if they had known the tests were flawed.
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Prosecutors said if Holmes had been truthful to investors and patients, the company would never have attracted critical funding and revenue.
“She chose fraud over business failure. She chose to be dishonest,” Assistant U.S. Attorney Jeff Schenk said at the beginning of concluding arguments. “That choice was not only mind-numbing, it was criminal.”
Holmes testified in her own defense during the trial, saying she never intended to deceive anyone and that Theranos’ laboratory directors were responsible for the test quality. As concluding arguments, defense attorney Kevin Downey said the evidence did not show Holmes was motivated by a lack of money at Theranos, but rather believed she was “building a technology that would change the world.”
“You know that at the first sign of trouble, the villains pay out,” but Holmes stayed, Downey said. “She went down with that ship when it went down.”
(Report by Jane Lanhee Lee in San Jose, California, and Jody Godoy in New York. Additional report by Ann Saphir in Oakland, California. Edited by Noeleen Walder, Peter Henderson, and Matthew Lewis)